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Tencent music guides pricing around midpoint in $1.2bn IPO

Dec 11 2018 21:18
Crystal Tse, Bloomberg

Tencent Music Entertainment, China’s largest music-streaming service, is guiding potential investors that it could price its $1.2bn US initial public offering around the midpoint of a marketed range.

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The company sees price sensitivity in the middle of the range based on current orders, according to a message communicated to fund managers on Tuesday. The final price hasn’t been set yet and the pricing level is subject to change.

Tencent Music will stop taking orders from Asian investors at the end of business on Tuesday and at noon New York time for US institutions, the message shows. The company and existing investors are marketing 82 million American depository shares at $13 to $15 each.

Chinese companies have raised $8bn from first-time share sales in the US this year, more than double the same period in 2017, data compiled by Bloomberg show. It’s the biggest year for mainland firms since 2014, when Alibaba priced the world’s largest IPO, the data show.

Tencent Music is slated to price its offering after the December 11 market close, according to terms for the deal obtained by Bloomberg earlier. Morgan Stanley, Goldman Sachs, JPMorgan Chase & Co, Deutsche Bank and Bank of America are among underwriters of the offering. The company declined to comment.

Net income at Tencent Music more than tripled in the first nine months of the year to $394m, according to an exchange filing. Revenue for the period nearly doubled to about $2bn. Its major shareholders include Tencent, which owns 59%, and music-streaming service Spotify Technology SA, with 8.9%, the filing shows. 

* Fin24's parent company Media24 is part of the Naspers Group. Naspers owns a stake in Tencent

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